In an opinion today the GM ignition switch MDL (prior coverage here), Judge Furman rejected the plaintiffs’ attempt to force GM and its lawyers at King & Spalding to produce, under the “crime-fraud” exception to attorney-client privilege, documents relating to King & Spalding’s advice on earlier ignition switch cases that were settled confidentially.

GM had earlier produced a substantial portion of the documents voluntarily (such as case evaluations sent to GM) but the plaintiffs sought additional documents – primarily internal King & Spalding correspondence. Judge Furman concluded that the plaintiffs had failed to show, as required for the “crime-fraud” exception, that these internal communications were made with the intent to further a crime or fraud, as opposed to merely relating to an evaluation of the legal risks of the cases that were settled:

Put simply, Plaintiffs do not provide a factual basis for a good faith belief that the communications and work product they seek — let alone any particular communications or work product they seek — were made with the intent to further a crime or fraud. Instead, the materials upon which they rely . . . appear to be nothing more than good-faith attorney evaluations of whether to settle individual cases in light of the risks of adverse verdicts and large damage awards against New GM.

To be sure, the confidential settlements . . . may, in some respects, have contributed to the delay in notifying the public and New GM’s regulators about the ignition switch defect. But there is an important distinction between effect and intent. And the record before the Court — which includes most, if not all, of the relevant communications between New GM and K&S, which their authors never had reason to believe would see the light of day — does not reveal any evidence that New GM’s intent in seeking to settle the matters was to conceal the defect from the public and its regulators.

[T]he case evaluations have all the hallmarks of dispassionate, sober evaluations (perhaps, in hindsight, too dispassionate and sober for their own good) by counsel of the costs and benefits of litigating the cases to their conclusion — just what one would might expect in a defense file and in the absence of a crime or fraud.

Steptoe & Johnson LLP

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